France’s energy checks could become a model in the EU

Nuclear power plant in Dampierre-en-Burly

Despite the many nuclear power plants, electricity is very expensive for the French.

(Photo: REUTERS)

Luxembourg Christian Zinglersen made the evening’s appearance at the meeting of euro finance ministers. Zinglersen is the head of an authority that the public does not know much about, namely the “EU Agency for Cooperation of Energy Regulators”, or ACER for short. He was supposed to answer the questions to which the ministers of the Eurogroup have not yet come up with much: Why are gas prices rising so sharply? And what can you do about it?

Zinglersen had good news with him. He sees the rise in gas prices as something temporary. In any case, it is to be expected that prices will fall again after the winter. However, the curves that Zinglersen presented also show that they no longer achieve the same level in the years that followed.

The basis for this forecast is the analysis that some special factors are currently affecting the price, which unfortunately occurred at the same time. The most important is the temporary sharp increase in demand, especially in Asia, said EU Economic Commissioner Paolo Gentiloni. The second is delays in infrastructure projects. Only 20 percent of the price increase is due to the prices in emissions trading – a result of a political decision.

For the governments this means: short-term measures against the crisis are not actionism, but appropriate. For a situation that will be over in a few months anyway, you don’t have to fundamentally question your energy policy.

Top jobs of the day

Find the best jobs now and
be notified by email.

France’s measure to pay out money to low-income households so that they can afford the increased energy prices could serve as a model. In addition to tax cuts, Zinglersen’s presentation proposes above all social measures that are independent of energy prices. Because these avoid the dilemma: namely that the price signals of the market should be received. When the price of energy is high, it is an incentive to use energy efficiently or to invest in new technology. The measures should be “temporary and targeted” and also in line with the green restructuring of the economy, Gentiloni said. This applies to such payouts.

The meeting of the Eurogroup also served to exchange experiences on such measures. On this basis, the EU Commission wants to present a “toolbox” that defines the appropriate tools with which the gas price crisis can be mitigated. Originally it was supposed to be presented this week, now we are talking about next week. There is a lot of work to be done, said Commissioner Gentiloni. The Commission is trying to offer new solutions that go beyond the traditional answers. The proposals from France and Spain would also be examined.

Measures for companies are also planned

Companies should also be considered. Euro group leader Paolo Donohoe pointed out that small and medium-sized companies are particularly affected. They must be helped so that the energy prices do not slow down the economic upturn.

France’s Finance Minister Bruno Le Maire called for European responses particularly emphatically. Before the meeting he announced a different analysis: The high prices are not a matter of months, but of years. His aim is to decouple electricity prices in France from gas prices. Since the French are mainly supplied with nuclear power, they are actually hardly dependent on gas. But electricity is traded across Europe, which is why French consumers are now paying high electricity prices.

Nor does Le Maire have time to wait for prices to fall in the spring. In April there will be elections in France. His militant appearance in Luxembourg showed that the government does not want the issue to be taken out of their hands by its competitors. When asked whether market intervention was really necessary, he replied: “Tell the families who now have to spend 400 or 500 euros more per year on their electricity”.

So it cannot be ruled out that short-term measures will not be left behind, but that the crisis will be used as an opportunity to make fundamental changes to the energy market. Former Commission President Jean-Claude Juncker had failed to create an energy union in which the regulation of electricity and gas would be standardized across the EU. Since then, things have only progressed in triple steps.

The fragmented European energy market is a brake on the climate protection package, said the CSU member Markus Ferber the Handelsblatt. “We need more integration in the energy market, that means: better cross-border connections of the networks, technical and regulatory harmonization and a review of competition law.”

More: Price caps, energy checks, tax rebates – EU countries are planning to intervene in energy markets

.
source site